The insurance industry is hundreds of years old. Ever since its inception it has been a complex yet steadily evolving industry. The field has come a long way in terms of technological advancements in the past few years. This progress has transformed the way insurance is sold and bought.
Presently, numerous advancements within Insurtech are reshaping the modern insurance industry. According to a McKinsey & Co. report, there has been over $10 billion of investment in insurtech since 2012. The advancements have made channel onboarding easier and significantly improved the distribution processes.
This blog will focus on how insurtech is reshaping insurance and simplifying the insurance distribution processes.
The Role of Insurtech in Insurance Distribution
An insurance company will have more than one distribution channel to reach their end customers. Insurance brokers and agents are a significant part of this distribution network.
With technology savvy players entering the industry, they are innovating changes and shifting the channels. The role of insurtech in insurance distribution channels include:
Innovative Digital Tools
Digital tools like partner portals have become a pivotal part of the shift. It is designed to empower channel partners with better technology and streamline the workflow. These tools have made the process less time-consuming and more transparent.
The channels also come with self-service panels for the channel partners to review their pipeline. With this information, they can enhance their workflow. It also includes their commissions earned and other stats important for the business.
These portals can enable the quick addition of channels and equip the insurers with tools for better management. It includes interactive dashboards that help analyze the performance of each channel partner.
The Self-Service Culture
Many customers, especially youngsters, prefer a mixture of self-service and guidance from their brokers and agents. According to a 2017 World Insurance Report, about 75% of tech-savvy customer prefer the ability to send claim notifications to insurers on their own. Plus, about 70% of customers prefer the ability to renew or cancel their policies online.
To meet customer expectations, Insurtech has combined channel functionality with an improved user experience. This has allowed insurers to create new distribution business models and partnerships. Further, digital distribution technologies offer agent and direct-to-consumer distribution in one platform.
Digitization – How Insurtech is Reshaping Insurance Distribution with Digitization?
Insurers in India and around the world are ramping up their digital strategies. Even the ones who were hesitant are being pushed to implement a digital strategy with the advent of the pandemic.
Insurers who faced a long turnaround time for launching an innovative product or process can now improve their legacy system. Insurtechs are coming up with faster and leaner technology platforms that integrate with the existing core and act as middleware.
This update enables faster configuration of insurance products and modifies workflows for more efficiency. It has also made innovative and complex insurance products like switch-on-and-off insurance easier to configure.
Currently, channels like PolicyBazaar sell insurance policies (including health insurance, life insurance, motor insurance, motor insurance, and others) online. They help customers in comparing various available insurance policies. With their information, customers need not spend a lot of time on research to make an informed decision. Players like these are changing the market scenario rapidly.
This is how insurtech is reshaping insurance and making way for business models that simplify the insurance processes and tailor-make policies to better meet end customer’s needs. The technologies part of this simplification are innovative digital tools, customer’s increasing need for self-service, and the digitization of policy issuance.
As we move forward, insurance distribution is going to change in more significant way since the technologies driving this transformation are also evolving. The partnership between insurtechs and insurance companies have opened up a lot of opportunities for both the parties.